The business behind the show

Harry Potter heads to Universal Studios Japan

May 9, 2012 | 12:39
pm

Harry Potter has conquered the world with books and then with movies. Now he’s doing the same with theme parks.

Universal Studios Japan on Thursday will unveil plans to build the first international version of the Wizarding World of Harry Potter, the blockbuster attraction that has drawn millions of fans to Universal’s Orlando resort and is coming to Los Angeles.

The Osaka destination -- expected to begin construction in the next few weeks with a planned opening in late 2014 and an expected cost of about $500 million -- brings Hogwarts Castle and rides including Harry Potter and the Forbidden Journey to the boy wizard’s biggest market outside of the United States.

The eight Potter movies grossed nearly $900 million in Japan -- more even than in his home country of Britain. Products including magic wand chopsticks have made the Harry Potter brand Japan's most successful movie-based consumer products line of the last decade.

But the book and film series are both complete, and fans who have grown into their 20s and 30s are buying fewer toys. Harry Potter is in need of a business transformation. The answer from Warner Bros. -- which owns the licensing rights to author J.K. Rowling’s books -- is theme parks. Potter has driven a stunning 68% increase in attendance at Universal Orlando and spurred visitors to spend millions on butterbeer during their visits and paraphernalia on their way out.

"This type of immersion is what the fans crave more than buying traditional merchandise," said Warner Bros. Consumer Products President Brad Globe. "Our strategy is focused on theme parks because it's a different experience. They’ve read the books and seen the movies, but now they can enter the world."

Despite the sluggish world economy, theme park owners have been investing and expanding in recent years. Market leader Walt Disney Co. is spending $4.5 billion to build a new park in Shanghai, $1 billion to upgrade Anaheim’s California Adventure Park, and $500 million on a new attraction in Orlando based on James Cameron’s hit film "Avatar."

Universal, meanwhile, has a major expansion of the Wizarding World of Harry Potter in Orlando planned in addition to the version in Los Angeles. And new Universal-branded parks are in the works in South Korea, Dubai and Russia.

"Across the board, theme park developers are doubling down on renovations and expansions," said Nima Samidi, an industry analyst at IbisWorld. "There's particularly a lot of activity in Asia because it's a fast-growing market that has a fascination with Western culture."

Revenue at Disney’s theme park unit grew 10% in the company’s last fiscal year to $11.8 billion, and Universal's was up 24% to $2 billion.

At Universal Studios Japan, which is owned by private investors including investment bank Goldman Sachs but licenses its name from the Hollywood entertainment giant, executives engaged in extensive research to gauge the public's interest in a Harry Potter attraction.

In a country of 127 million, more than 80 million tickets to Potter films have been bought and about 24 million books have been sold, giving the story of the orphan boy turned world-saving magician four spots among Japan’s top 10 all-time bestsellers.

The park also conducted surveys to gauge current levels of enthusiasm and what Japanese audiences like most about the series.

"Magical coming-of-age stories play very well in Japan, particularly when they're about the balance between ordinary life and something fantastical," said Glenn Gumpel, president of Universal Studios Japan.

Similarly themed works like the animated movie "Spirited Away" from director Hayao Miyazaki and video game series The Legend of Zelda from Nintendo are among the nation's most popular works of pop culture.

With its opening expected in under three years, the Wizarding World of Harry Potter in Japan will open sooner than the one in Los Angeles, despite the fact that the deal, which came out of talks that began last summer, was closed more recently.

That’s because at Universal Studios Hollywood, there's no room for expansion, meaning existing attractions must be demolished or renovated to make room for magic. As a result, it's not expected to debut until 2016.

In Osaka, meanwhile, the Wizarding World will be built alongside existing rides based on Spider-Man, "Jurassic Park" and "Jaws."

"We're already growing and expect we’ll get millions more people once we launch Harry Potter," said Gumpel, whose park drew more than 9 million people last year.

The Wizarding World of Harry Potter is a cash cow for Warner Bros., which gets a substantial upfront free for each Universal attraction and a share of admissions and merchandise sales. In addition, Warner conducts tours of the soundstage in Leavesden, Britain, where the "Potter" films were shot.

And though there are few rival parks, outside of ones owned by rival Disney, that would be natural homes for Potter rides, the studio already has its eye on eventually launching more Wizarding Worlds.

"A lot of work goes into building these parks, so we’re probably at the limit of what we could manage at the moment," said Globe. "But if some other great opportunity for Harry Potter presents itself, we would certainly take a look at it."

In a statement, Rowling gave her stamp of approval to the newest addition to her Harry Potter empire:

"I was delighted to experience and enjoy the attention to detail, creativity and superb craft that went into the first Wizarding World in Orlando,” she said. “I am equally delighted that the same level of expertise and enjoyment will translate to the new park in Japan.”